[It’s worth nothing that Shell is trying to complete its merger with BG Group — one of the biggest oil deals in history — and low oil price forecasts are damaging for the company’s health.]

In a report entitled ” Global Energy Weekly: Can oil prices find a floor?” Francisco Blanch and his team of strategists at Bank of America Merrill Lynch said:

… we are now revising down our crude oil forecasts and see Brent averaging $46/bbl in 2016, from $50 prior, and WTI $45/bbl, from $48 prior.

This is mainly because while “c onditions for floor on oil are coming together,” OPEC’s price war — which is intended to flood the market with supply, meaning prices will be purposefully pushed lower — “got worse over the weekend.”

There are no other benefits to prices going as low as they are for oil-rich nations other than this long-term strategy.

On top of this, BAML warns that considering there is over-supply in the market at the moment, this is only going to be exacerbated when Iran hits the market with its oil supply after a period of sanctions.

BAML strategists warned in earlier notes that crude oil prices could fall as low as the mid-$20s per barrel — albeit short term. However, if you take an average of the whole year’s fluctuation, it predicts that crude oil forecasts will be around the levels that are stipulated above.

NOW WATCH: Money & Markets videos

Want to read a more in-depth view on the trends influencing Australian business and the global economy? BI / Research is designed to help executives and industry leaders understand the major challenges and opportunities for industry, technology, strategy and the economy in the future. Sign up for free at research.businessinsider.com.au.